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It's time to vote, Louisiana: 4 amendments you need to know before heading to the polls

After Category 4 Hurricane Ida's landfall on Louisiana's coast, Election Day was pushed back for Louisianans.

Now, it's finally here, with early voting beginning Saturday. Residents across the state will find four major amendments on their ballots.

In this guide, we give you a breakdown of these amendments and dates to know as you prepare to head to the polls.



DATES TO KNOW

October 30-November 6: Early voting held from 8:30 a.m. to 6 p.m.

November 9: Deadline to request an absentee ballot

November 12: Deadline to receive a mail-in ballot

November 13: Election Day from 7 a.m. to 8 p.m.



AMENDMENT 1

Here’s the language you’ll see on the ballot:

“Do you support an amendment to authorize the legislature to provide for the streamlined electronic filing, electronic remittance, and the collection of sales and use taxes levied within the state by the State and Local Streamlined Sales and Use Tax Commission and to provide for the funding, duties, and responsibilities of the commission?”

How would it work?

The goal of Amendment 1 is to overhaul Louisiana’s sales tax collection system, taking the authority to collect taxes away from local governments and give it to a centralized state-run sales tax collection system.

It is a key component of Republican state lawmakers’ efforts to overhaul the state’s tax code during this year’s legislative session.

Louisiana is one of only a handful of states with a completely decentralized sales tax collection system. This leaves local taxing authorities responsible for collecting all state (4.45%) and local (usually 5%) sales taxes. Depending on the parish, that duty can fall to a dedicated office of the municipal government, the local sheriff, police jury or even the local school board.

This system burdens businesses with the responsibility of paying the correct amount of sales tax to the appropriate local taxing authority.

That’s simple enough for brick-and-mortar retailers located in a single parish, but the patchwork system becomes cumbersome for larger businesses located in multiple parishes and online sellers who may not have a presence in Louisiana at all.

To fix this, state lawmakers passed legislation that would create the State and Local Streamlined Sales and Use Tax Commission.

The new commission would be comprised of state and local officials who together would create a centralized electronic filing system to collect sales taxes and remit them to the state revenue department or the appropriate local government entity. The commission would also issue policy advice and develop rules to audit the new system.

If this amendment passes, the newly formed commission and state lawmakers would have to work out the details of the new system and pass legislation before the changes could take place.

Who’s for it and who’s against it?

Unlike some of the other measures on this list, this proposed constitutional amendment has broad support across party lines and among a variety of stakeholders, including the Police Jury Association of Louisiana, Louisiana School Boards Association and Louisiana Sheriffs Association. The Louisiana Municipal Association has taken no official position on the proposed amendment but has committed to working on the sales tax commission if it wins voter approval this fall.

For years, previous attempts to change the system failed because local tax collecting authorities, namely sheriffs’ offices and police juries, opposed the change, arguing that they were best positioned to understand the needs of local businesses. Furthermore, they argued that switching to a centralized system would disrupt local governments’ cash flow by requiring them to go to a state agency to get the local sales tax revenues.

House Speaker Clay Schexnayder closely consulted those critics when drafting this legislation, which would give them a significant role on the commission that would create and regulate the new system.

But some representatives of local governments still oppose the shift to centralized sales tax collection — most notably New Orleans Mayor Latoya Cantrell. Cantrell asked supporters to vote against the amendment, saying the shift would give decision makers in Baton Rouge control of sales tax dollars that the city relies on for more than 30% of its operating budget — dollars that could be delayed on the political whim of the panel members. Earlier this year, Republican members of the State Bond Commission voted to delay funding for improvements to the Caesars Superdome and other previously approved Orleans Parish projects in apparent retaliation for Cantrell's imposition of a COVID-19 vaccine requirement.

The Public Affairs Research Council, a good-government group that typically takes a neutral stance on ballot initiatives, has campaigned for this change for years.



AMENDMENT 2

Here’s the language you’ll see on the ballot:

“Do you support an amendment to lower the maximum allowable rate of individual income tax and to authorize the legislature to provide by law for a deduction for federal income taxes paid?”

How would it work?

Amendment 2 would execute what Republican legislative leaders like to call a “tax swap.” In a nutshell, the swap would lower the maximum state income tax rate from 6% to 4.75% for individuals, rework the state’s corporate tax brackets and franchise tax, and would no longer allow individuals and businesses to deduct the amount of federal income taxes they pay from their income when calculating the state income tax obligation.

If Amendment 2 is approved by voters this fall, three pieces of legislation would take effect.

Act 395 would eliminate the federal income tax deduction listed above and reduce state income tax rates. Act 396 would slim down the state’s corporate tax brackets and cap the corporate tax rate at 7.5% for annual business earnings above $150,000. Act 389 would eliminate the state’s corporate franchise tax for businesses with less than $300,000 taxable capital and significantly reduce the rates for businesses above that threshold.

Louisiana and Alabama are the only states in the country that have a deduction for federal income taxes paid. The policy creates a seesaw effect that destabilizes state revenue. When the federal government lowers taxes, as it did in 2017, state income tax collections increase. If and when those 2017 tax cuts are rolled back by Democrats in Washington, Louisiana’s income tax collections would take a hit.

Who’s for it and who’s against it?

This amendment covers a lot of ground, and folks who support one part of the initiative may oppose another.

The National Federation of Independent Businesses has come out in support of Amendment 2, and the Louisiana Association of Business and Industry supported the proposed tax reductions during the last legislative session. The Pelican Institute for Public Policy, a free-market think tank based in New Orleans, said the changes Amendment 2 would bring to the state’s tax code will “make Louisiana more competitive with our neighbors, attracting more jobs and opportunities for our families.”

While the amendment eliminates one big tax exemption for individuals, it does little to reduce the hundreds of tax exemptions Louisiana businesses currently enjoy. Last session, special interest groups torpedoed a bill that would have axed more than 100 business tax exemptions.

The Louisiana Budget Project, an organization that advocates for low- and moderate-income families, said Louisiana’s current tax structure disproportionately burdens low-income people and fails to raise enough money to pay for the services those Louisianans need most. They argue that Amendment 2 does not address those issues.

For his part, Democratic Gov. John Bel Edwards said earlier this year that he only signed off on Republican lawmakers’ tax reform package because it remained revenue neutral. PAR predicts that the changes would reduce the state general fund by 0.3%.



AMENDMENT 3

Here’s the language you’ll see on the ballot:

“Do you support an amendment to allow levee districts created after January 1, 2006, and before October 9, 2021, whose electors approve the amendment to levy an annual tax not to exceed five mills for the purpose of constructing and maintaining levees, levee drainage, flood protection, and hurricane flood protection?

How would it work?

Flood control is a part of life in Louisiana. The state constitution has allowed levee boards established before 2006 to impose a property tax of up to 5 mills to offset the cost of their operations. But the eight levee boards established after Jan.1, 2006 cannot raise that tax without the approval of voters living in that levee district.

The disparity is an unintended consequence of reforms the state made to its levee regulations after Hurricane Katrina. Five of the eight levee districts founded since 2006 have been successful in winning over voters and raising that 5-mill tax, but three have not.

If passed, Amendment 3 would give any new levee district the authority to impose up to a 5-mill tax. It would also allow the eight districts created after Hurricane Katrina to impose the tax as well, but only if the amendment is approved by a majority of voters in those districts in this fall’s election.

Who’s for it and who’s against it?

The state’s Coastal Protection and Restoration Authority supports the change, saying local communities need to help the state and federal government foot the bill to build and maintain levee protections.

The state and the federal government have already committed $1 billion to levee improvements in St. Tammany Parish and $2 billion in southwest Louisiana.

In early discussions about the proposed amendment, some lawmakers expressed concern about a measure that would take away local voters’ ability to approve or reject new taxes.

But Sen. Rick Ward (R-Port Allen) said while only some of the newly created levee districts have been successful in raising local taxes, all of them critically need a local revenue source to stay on top of maintenance and improvement projects that may not warrant attention from the state or federal government.

“In some of the cases, it’s a situation where it’s easier to get a constitutional amendment done than it is to get some areas to vote to pay for their own protection,” Ward said.

Most lawmakers were won over by the CPRA’s argument. The measure cleared the Senate with unanimous approval and cleared the House on an 81-10 vote.



AMENDMENT 4

Here’s the language you’ll see on the ballot:

“Do you support an amendment to increase the amount of allowable deficit reductions to statutory dedications and constitutionally protected funds from five percent to ten percent?”

How would it work?

Louisiana is awash with statutorily and constitutionally-dedicated funds. As lawmakers craft the budget each year, they have to work around large chunks of money that have already been promised to certain state programs.

In an ideal scenario, these dedicated funds ensure that high-priority programs will always have the money they need to fulfill their purpose. But these funds can also make it difficult for lawmakers to adjust when priorities change or when other valued programs are underfunded.

But in times of fiscal crisis, lawmakers have greater authority to tap into those dedicated funds to balance the state budget.

The Joint Legislative Committee on the Budget can take up to 5% percent of each dedicated fund and redirect it to a program in need. If passed, this amendment would increase that cap to 10%.

Who’s for it and who’s against it?

Because of Louisiana’s current structure of statutory dedications, the state’s healthcare and higher education systems are the first to lose funding when Louisiana experiences a budget crisis. The people who rely on those systems for their paycheck or essential services would benefit from the passage of Amendment 4.

Someone could argue that with the current 5% cap, lawmakers already have enough funding to balance the budget if a deficit arises, and extending it to 10% would jeopardize priority programs to indulge a government that can’t live within its means.

But in reality, this proposed amendment attracted very little attention and debate as it sailed through the legislature last spring.

It was unanimously approved by the House of Representatives, and only State Sen. Karen Carter Peterson of New Orleans voted against the bill.
Copyright 2021 WRKF. To see more, visit WRKF.

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